Investing via the PEA-PME: Guaranteed tax relief

The Plan d'Épargne en Actions pour les Petites et Moyennes Entreprises (PEA-PME) is an attractive investment scheme, offering investors a unique opportunity to support the local economy while enjoying attractive tax benefits. In addition to the tax benefits, investing in investment funds via the PEA-PME can also be an excellent strategy for diversifying your portfolio.

It is essential to understand how to optimise this investment and to identify the potential risks before embarking on it.

The PEA-PME allows individuals to invest in the shares of small and medium-sized enterprises (SMEs), but also in intermediate-sized enterprises (ETIs), which meet strict criteria defined by law. This scheme is an extension of the traditional PEA, specifically designed to support financial investment in French and European companies.

Criteria for eligible companies

To be eligible, companies must meet a number of criteria:

• Have fewer than 5,000 employees
• Sales of less than €1.5 billion or total assets of less than €2 billion
• Be listed or unlisted on a stock exchange

These criteria ensure that funds invested via a PEA-PME really do support SMEs and SMIs that need capital to grow.

Investing in a PEA-PME offers significant tax benefits, enabling investors to reduce their tax bill while supporting growing businesses.

Exemption from capital gains tax

One of the main advantages of the PEA-PME is the tax exemption on capital gains, provided that the shares are held for at least 5 years.

Reduced income tax

Payments made into a PEA-PME may qualify for a reduction in income tax under the Finance Act.

Payment ceiling

The maximum amount that can be paid into a PEA-PME is €225,000, which means that you can invest substantial amounts and still benefit from the associated tax advantages.

The PEA-PME offers great flexibility in terms of investment strategies, allowing investors to adopt a diversified approach.

Sectoral and geographical diversification

The PEA-PME allows investors to invest in a variety of sectors, including technology, healthcare, renewable energy and industry. It is also possible to extend investments to European companies.

Taking risk into account

Companies eligible for the PEA-PME are often SMEs or ETIs, which are more sensitive to economic fluctuations. They can offer attractive long-term return opportunities.

The role of Eurazeo Wealth Solutions

Eurazeo, a recognised expert in private equity, assists its clients in selecting high-potential companies while taking into account the associated risks. Thanks to an in-depth analysis of the markets and companies eligible for the PEA-PME, Eurazeo puts forward investment strategies tailored to investors' objectives.

Investing in unlisted companies presents specific risks, particularly in terms of liquidity and transparency. This is why rigorous management is essential before making any commitment.

Liquidity risk

The shares of SMEs are less liquid than those of large listed companies.

Volatility risk

SMEs and SMIs are often more subject to fluctuations in value.

Sector concentration risk

Investing in a single sector increases exposure in the event of a market downturn.

Company management and performance risk

SMEs are sometimes run by less experienced teams.

Regular monitoring is essential: re-evaluating the composition of the portfolio, adjusting according to economic developments and company performance.

The PEA-PME offers an attractive tax advantage, allowing you to invest in SMEs while benefiting from tax exemption on capital gains. Careful, rigorous management is the key to taking full advantage of this scheme.

This article was produced by Eurazeo Global Investor and is for information purposes only. It does not constitute a solicitation, a personalized recommendation or an offer to the public. Readers are invited to consult their usual advisors for any additional analysis.

Past performance is no guarantee of future performance. Investing in private equity or private debt funds involves specific risks, in particular capital loss, volatility and illiquidity.